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How does the budget line change if the price of good 2 decreased by a rupee but the price of good 1 and the consumer's income remain unchanged ?

Answer» <html><body><p></p>Solution :When price of <a href="https://interviewquestions.tuteehub.com/tag/good-1009017" style="font-weight:bold;" target="_blank" title="Click to know more about GOOD">GOOD</a> 2 decreases, then the budget <a href="https://interviewquestions.tuteehub.com/tag/line-1074199" style="font-weight:bold;" target="_blank" title="Click to know more about LINE">LINE</a> will shift to the right from AB to `AB_(<a href="https://interviewquestions.tuteehub.com/tag/1-256655" style="font-weight:bold;" target="_blank" title="Click to know more about 1">1</a>)`. The new budget line meets the X-axis at the same <a href="https://interviewquestions.tuteehub.com/tag/point-1157106" style="font-weight:bold;" target="_blank" title="Click to know more about POINT">POINT</a> A because there is no change in the price of good 1. But it will touch the Y-axis to the right of B at point `B_(1)` because the consumer can purchase more of good 2 at the same income <a href="https://interviewquestions.tuteehub.com/tag/level-1072714" style="font-weight:bold;" target="_blank" title="Click to know more about LEVEL">LEVEL</a>. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/SG_MIC_ECO_C02_S01_069_S01.png" width="80%"/></body></html>


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